SEBI Seeks Information On High-Risk Clients From FATF Grey-List Nations

In a significant move to counter money laundering, the capital market regulator Securities and Exchange Board of India (SEBI) has sought a list of ‘high-risk’ individual clients and investors belonging to grey-list nations of the financial action task force (FATF).

The market watchdog also asked asset and portfolio management companies to explain how they implement the resolutions of the United Nations under the local law Unlawful Activities (Prevention) Act and FATF.

India is member nation of FATF and has to freeze accounts against ‘high-risk’ investors to avoid being in the grey list countries of considered to have “strategic deficiencies” in combatting money laundering and terrorist financing-related activities.

The market regulator has asked companies to share the number of offshore clients, investors against whom orders have been issued by other law enforcement agencies and have been in the limelight due to financial scams by November 30 to the market watchdog.

In accordance with the FATF guidelines, SEBI has sought information regarding the number of alerts and suspicious transactions made, the mechanism in place to detect attempted transactions and response time taken to freeze accounts once a risk-prone investors are detected.

The companies were asked to state parameters used for risk categorisation, money laundering and terror finance risk are captured in risk categorisation.